Despite the ongoing conflict between Palestine and Israel, international oil prices have recently significantly declined, with some attributing this to a slowdown in economic growth leading to a decline in demand.
Pierre Andurand, the head of the world's largest oil hedge fund, and renowned as the "god of crude oil trading," pointed out that better than expected oil supply was the trigger for the recent decline in crude oil prices.
Against the backdrop of a bleak economic outlook, Brent crude oil futures fell below $80 per barrel for the first time in three months this week. But Andulan stated that "travel data shows an acceleration in demand and demand growth," indicating that consumption is not the reason.
Compared to previous years, supply disruptions are much less, and production in Iran and the United States is higher than expected, "Abdulan said on social media platform X.
Andulan also pointed out that part of the reason for the better than expected crude oil supply is due to the rebound in OPEC+alliance exports from the extremely low level in August. But he added that since exports usually increase in September and October, this growth does not mean that the alliance has failed to comply with crude oil production quotas.
According to the data released by the US Energy Information Administration (EIA) last week, the US crude oil production in August hit a record high, surpassing the level before the COVID-19. Data shows that in August, the US crude oil production reached 404.6 million barrels, with an average daily production of 13.05 million barrels. This production exceeded the previous high of 13 million barrels per day set in November 2019.
A media survey in early November showed that OPEC crude oil production in October further increased by 180000 barrels per day compared to September, marking the third consecutive month of increase, with Nigeria, Angola, Iran, and Iraq experiencing the largest increase in production. Iran's production increased to 3.17 million barrels per day in October, the highest since 2018, the year when the United States re imposed sanctions on Iran.
In early November, Iran's oil minister stated that Iran's daily oil production had risen to 3.4 million barrels.
Andulan stated that while OPEC+exports have increased, China (the world's second largest oil consumer) has also used inventory, weakening the overall physical oil market. This usually prompts buyers to hesitate in anticipation of a cheaper price.
He pointed out that to achieve oil prices& Quot; Substantive structural rebound; Quot;, We need to continuously reduce inventory, similar to the daily decrease of over 1.5 million barrels in July and August.